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Mandatory Country of Origin Labelling Expected to Increase Processing Costs
CANADA - The George Morris Centre says new US Mandatory Country of Origin Labelling legislation will increase the cost of processing pigs in the U.S. but more so for Canadian pigs, writes Bruce Cochrane.  Farm-Scape is sponsored by
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Mandatory US Country of Origin Labelling regulations, scheduled to come into effect in September 2008, will require pork to be labelled according to its country of origin.
Pork from pigs born, raised and slaughtered in the U.S. will be labelled product of the U.S., pork from pigs raised partially in Canada and slaughtered in the U.S. will be labelled product of Canada and the US and pork from pigs born, raised and slaughtered in another country will be labelled according to its nation of origin.
Senior researcher Dr. Al Mussell says the provisions will add to the cost of processing pigs from both countries in the U.S. but more so for Canadian pigs.
Dr. Al Mussell-George Morris Centre
This creates an additional cost burden that U.S. packers have to deal with in terms of procurement of Canadian hogs or hogs that were born in Canada and raised in the U.S. in terms of information tracking and so forth.
That cost is very likely to end up being just simply worked through the procurement system to lower pricing for Canadian product.
Some processors are of the opinion that they already have to segregate and sequence hogs in a particular way for the basic programs that they process under so that maybe this isn't going to be a big adjustment.
Other plants feel that it will be a very significant adjustment and are going to incur significant costs.
A few years ago we looked at it and we thought that the range of compliance cost was probably somewhere in the window of five to ten dollars per hog.
That's about three or four years dated now so it may be different and there's probably a significant amount of error around that depending on the size of the plant.
But ultimately we expect it will be a material cost.
Dr. Mussell notes U.S. retailers like to have the ability to source product from as many countries as possible and they are quite happy to sell Canadian product but they'll be hesitant to pay additional costs to do so.
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